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Lucian Freud’s treasured collection of paintings and drawings by his friend Frank Auerbach is to be distributed to galleries across the UK in lieu of around £16m in inheritance tax, it has been announced.

The 40 paintings and drawings were offered to the nation after Freud’s death in 2011, representing the largest ever single agreement under the acceptance in lieu (AIL) scheme.

On Monday Arts Council England, which administers the scheme, announced that every part of the UK would benefit, with galleries in cities including Belfast, Aberdeen, Cardiff and Newcastle all set to be get Auerbachs.

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More than 40 paintings, drawings and birthday cards by Frank Auerbach, all of them owned by his friend and admirer Lucian Freud, have gone on public display as a group before they are dispersed to collections around the UK.

In May it was announced that Freud's estate had offered the 15 oil paintings and 29 works on paper by Auerbach, one of Britain's greatest living artists, to the government in lieu of around £16m of inheritance tax.

Because the bequest is so large and valuable it is being split up with museums and galleries now bidding for different works and groupings of works. Before that happens all the works are being displayed together at Tate Britain.

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